Optimization is Vital to Defense Sector Supply Chain Innovation

Written By: Bruno Zindy
  • 5/4/2021
  • Read Time : 4 min
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It’s fascinating how innovations in one field can spur innovations in another domain. Space exploration innovations, for example, have had a significant impact on windsurfing. In general, technology innovations have enhanced and helped reinvent many sectors.

The defense vertical has been a strong driver of development and innovation for the supply chain and operational research sector.

The defense supply chain grows ever more complex in today’s financially constrained environment. Rapid technology innovation and changing requirements of global forces are leading drivers. Condition-based maintenance is an impactful influence that is becoming a standard requirement within the industry.

For effective condition-based maintenance, the availability of the service parts is paramount.

The current trend, adopted by military organizations and governments, is to concentrate the responsibility of material availability to external 3rd parties, generally the equipment manufacturers. These organizations no longer focus on service parts or maintenance operations but principally concentrate on the availability of equipment for the warfighter. For technology to deliver maximum equipment availability, it must be highly capable and flexible. Offering classical sub-objectives, such as parts availability, forecast accuracy, and inventory turns, is status quo.

Military Challenges: Solving Complex Service Supply Chain Challenges

Optimizing a complex service supply chain to maximize equipment availability requires numerous technology innovations, including Multi-Echelon Optimization (MEO), Multi-Indentured Multi-Echelon (MIME), and advanced data science, including AI/ML/Big Data/IoT. Let’s explore why these capabilities are crucial.

  • Mission planning is a requirement of army item managers. Planning a deployment with a focus on completing the mission requires defining the service parts replenishment requirements. The supply plan should take into account the ability to cannibalize some of the assets over the course of the mission to support replenishment strategies.
  • Service parts positioning within the network must be done efficiently to achieve maximum availability and readiness. Spontaneous crises and fluctuating demand are commonplace within the highly unpredictable global theater. Astute distribution of service parts within the network should consider both the importance of the customer requiring the part, and the importance that this part represents for the customer (i.e. its ability to improve the overall availability of a fleet).
  • Performance-based logistics contracts include requirements for equipment availability and service parts availability. These contracts demand from OEM’s the ability to perform rapid assessments to ensure compliance with agreed-upon outcomes and understand the cost impact within the service supply chain.
  • Pooling inventory is an interest of many allied forces and a strength worth capitalizing on. They pool together some of their service parts, lower their costs, and achieve a high fleet availability. Additionally, leveraging the ability to move expensive items around the network rapidly can help delocalize availability when a backup location is available.
  • Monitoring failure rates closely is driving retrofit campaigns. Service parts planners can make great use of the failure rates to reshape the stock mix by anticipating demand with greater precision.
  • IoT-enabled equipment captures valuable performance data that is helpful to refine stocking levels and improve stocking decision making. Connected equipment data unleashes the best of both world’s scenarios. With advance notice of required service, organizations can make the best decisions repositioning parts and equipment within their service supply chain. Additionally, the initial forecasted demand is improved by more than 30% when IoT data is available. Other actions, including recertification of parts, can also help overcome a temporary peak of demand on an expensive Line Replaceable unit. The result is maximizing equipment availability and operational excellence.

 

Optimization: Today’s Best-In-Class

Best-in-class organizations capable of executing performance-based logistics contracts and condition-based maintenance do so with cutting-edge technology. The outcome is well worth the investment with double-digit improvements to their overall equipment availability. Optimization is a never-ending process of adjusting to tradeoffs and adapting to new data and mission requirements. True inventory optimization simultaneously models every part at every location in one run and can guarantee the organization's lowest inventory investment. Organizations leveraging artificial intelligence and machine learning have a distinct advantage. AI/ML has demonstrated the capacity to learn and refine models. Further, simulation capabilities are an excellent method of proving AI/ML results to ensure tangible benefit.

It is a complex and challenging environment, but defense organizations must maximize their investments while ensuring readiness and equipment availability. Servigistics delivers these capabilities and is the undisputed industry leader delivering maximum equipment availability, readiness, and operational excellence.

We have seen impressive innovations for decades accelerating over the last few years. Considering the requirements of states to reduce their defense investments, there is no doubt that defense forces will have to be strategic. Optimization is imperative to successful allocation of investments in such a challenging and complex environment.

Servigistics delivers maximum value

Servigistics innovations in artificial intelligence, machine learning, big data, and IoT will optimize your service supply chain and maximize operational excellence.

Tags:
  • Service and Parts
  • Servigistics
  • Aerospace and Defense
  • Digital Transformation
  • Connected Devices

About the Author

Bruno Zindy

Bruno Zindy
Connected SLM and SKM Presales Engineer, PTC

With 20 years of experience in supply chain management, I visited countless accounts to deliver either consulting or services.
I developed a detailed knowledge of new technologies and the business value that they deliver.

My passion for aftermarket supply chains and the particular challenges that they entail has led me to gain expertise in subjects such as:

  • How to relate pricing activities with stocking activities.
  • How IoT is going to diminish service cost.
  • How to fulfill specific requirements based on the skills of specific technicians and the availability of parts.
  • Integrating the aftermarket supply chain in the global SOP process.
  • Keys to handle a multi-level supply chain down to dealer and van stocking points.